Technology | Media | Telecommunications

Tuesday, February 03, 2015

Personal Computing Market Volatility Lingers in 2015

The personal computing market continues to evolve as new device demand shifts to reflect the ongoing changes in vendor pricing strategy. Case in point: worldwide media tablet shipments fell 12 percent year-on-year to 67 million units in Q4 2014, according to the latest market study by Canalys.

The desktop computer market fell back into a decline in the fourth quarter, as demand for Microsoft Windows XP upgrades decreased. Moreover, the notebook PC market held firm with another quarter of just 1 percent growth.

Clearly, the overall personal computing market has been somewhat volatile. Given the current market outlook, that's unlikely to change in the foreseeable future.

Total PC shipments (desktops, notebooks and tablets) fell by 6 percent in Q4 to reach 148 million units, resulting in full-year 2014 shipments of 528 million units, that's up by just 3 percent on 2013.

Apple regained the top spot in the PC market on the strength of holiday sales, with just under 27 million units shipped. Lenovo’s shipments grew 6 percent year-on-year to almost 20 million units as it increased its market share to 13.3 percent.

Meanwhile, Samsung dropped out of the top three to make way for HP, with growth of 17 percent driving shipments over 17 million units -- that's their best quarter since Q3 2011.

However, Apple's year-on-year tablet shipments declined once again -- down by 18 percent. That performance is now the fourth quarter of this downward trend for Apple.

Second-placed Samsung could also not repeat its media tablet success of Q4 2013, with its first annual decline of 24 percent to 11 million units.

"Despite a strong sequential uplift in tablet shipments, the total market contracted for the first time in Q4, as expected," said Tim Coulling, senior analyst at Canalys.

In addition to the slowdown at the top of the tablet market, the low end also suffered significant declines. In Q4 2014, 7" tablets made up half of total Google Android tablet shipments, a segment that has seen steady declines from a high of 66 percent in the first quarter of the year.

In the notebook PC market, Windows with Bing has proved to be a success in volume terms as Microsoft responded to increasing competition from Google Chromebooks in certain markets. The new price points it enabled stimulated notebook demand in Western Europe and the U.S. market.

This development impacted tablet sales in these markets in the fourth quarter, as consumers opted to replace aging notebook PCs. Canalys expects declines in the first half of 2015 as notebook PC inventories re-balance and the subsequent retail price increases will likely stifle further consumer demand. That being said, we can therefore anticipate continued market volatility.